The U.S. and its allies have imposed unprecedented economic and financial sanctions on Russia — more than have ever been imposed on a single country.
But what do these sanctions mean for Russia and the rest of the world? An expert explains ...
But what do these sanctions mean for Russia and the rest of the world? An expert explains ...
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00:00We're going after two things, trying to squeeze the Russian economy and also trying to squeeze
00:05those oligarchs, right?
00:10There are now more sanctions in place against Russia than there are against Iran, Venezuela,
00:17Myanmar and Cuba combined. Never in two weeks alone have such a set of measures being imposed.
00:24In the last decade or so, we have largely used economic and financial sanctions to respond to
00:31threats. These types of sanctions include commercial and financial penalties such as
00:37asset freezes, travel bans, restricting imports and suspending trade ties.
00:43Russia's long previewed invasion of Ukraine has begun and so too has our response.
00:59We announced yesterday that constitute the strongest, most consequential set of sanctions
01:18and other economic measures ever imposed. All 10 of Russia's largest bank, which hold 80 percent
01:26of the assets in Russia's banking sector, are now subject to these measures.
01:32We've seen the UK, the US and the EU, as well as other allies such as Canada,
01:38impose significant asset freezes and travel bans on Russian oligarchs, that being those close to
01:46Putin. When looking at the frozen assets, most significant would be that of the asset freeze
02:01against Russia's central bank, which essentially targets about 650 billion dollars in foreign
02:08reserves. Any funds, any assets, any property they own in the West, they will now no longer
02:24be able to access or, it depends on the country in question, there will be a limit on the amount
02:30of money which they can hold in, for example, the United Kingdom or in the European Union.
02:36What this means is it makes life a lot harder for these oligarchs. They can't access their yachts
02:41in Italian ports anymore or they can't live in their properties in Kensington and London.
02:48The effects of these measures are to hit those close to Putin.
02:51We've seen citizens withdraw funds as banks have been banned from
03:21SWIFT. We've seen Russian citizens move cash to autonomous payment systems, as well as Russian
03:28businesses struggle to adapt to the new reality now that they are removed from the global supply chain.
03:35The impact beyond this, beyond the business point of view,
03:48is that Russia has been suspended from key sporting competitions, as well as from Eurovision.
03:56Russia is deeply integrated into the global economy. It is a significant gas and oil
04:07exporter, meaning that these sanctions will have a knock-on effect not only in Russia itself,
04:13but all around the world. Today I'm announcing the United States is targeting the main artery
04:18of Russia's economy. We're banning all imports of Russian oil and gas and energy.
04:24The average price per gallon is now more than $4.17 and is expected to continue to rise.
04:32Russia and Ukraine are also some of the main global wheat producers and exporters. And prices
04:40of wheat have, as the invasion has had an impact on the global supply chain, surged to those that
04:46we last saw in 2008 with the global financial crisis. Essentially what this means is for
04:52those outside of Russia, globally, we'll see spikes in energy and grain prices and a likely
04:59long-term increase in food prices. For an effective sanctions strategy,
05:16you should always combine it with another tool of foreign policy. In this case, diplomatic tools.
05:23Dialogue, peace talks, and negotiation alongside the effects of the sanctions
05:30will make the economic costs of maintaining military presence in Ukraine increasingly
05:35unsustainable.